But wide gap with lowest bid points to divergence in market reading

[SINGAPORE] Despite last month's rule changes affecting the executive condo market, an EC site in Jurong West has drawn strong interest with 12 bids and a high top bid of $381.81 per square foot per plot ratio (psf ppr) from a Koh Brothers-Heeton Homes partnership.This was near the top end of the range predicted by property consultants when the site was launched in late October. And the top bid was just 0.45 per cent from the next highest offer of $380.08 psf ppr by a joint venture between City Developments and TID.Most market watchers declared the outcome as a reflection of developers' confidence that demand for ECs would remain strong. However, some pointed to a wider gap between the top and lowest bids at yesterday's tender compared with the previous EC land tender last July. This could mean a bigger divergence in developers' take on this public-private housing hybrid."While the top few bids were more optimistic, the bottom half of the bids were generally cautious and below expectations," said Jones Lang LaSalle national director Ong Teck Hui.Perhaps some developers were just taking the opportunity to try some bottom-fishing at yesterday's tender for the site in Westwood Avenue.Situated next to the Pan Island Expressway, the 520,945 square foot land parcel is opposite the Cleantech Park.Effective Dec 10, a 30 per cent mortgage servicing ratio cap was introduced on housing loans for those buying EC units directly from developers.Also, the future project on the Westwood Avenue plot will be the first in recent times where second-timer applicants (that is, HDB upgraders) will have to pay the Housing Board a resale levy of up to $50,000, notes SLP International executive director Nicholas Mak.The 12 bids at yesterday's tender were lower than the 16 that a more choice plot in Yuan Ching Road near Jurong Country Club fetched last July. The $419 psf ppr winning bid for that site also set a fresh high for EC land.R'ST Research director Ong Kah Seng told BT he had clipped his prediction on the top bid for the Westwood Avenue site to $340-380 psf ppr following last month's rule changes, from $360-390 psf ppr initially.When contacted, Francis Koh, managing director and group CEO of Koh Brothers Group, said: "We lowered our land bid slightly. If awarded the site, we plan to build a project with about 480 units."When launched next year, the project will be "priced to sell"."ECs will remain a very popular option for HDB upgraders - despite the recent measures. In line with a healthy living theme, we plan to promote a cycling community by having bicycle parking facilities and a cycling track within the development," said Mr Koh.Analysts estimate that the top bid reflects a breakeven cost of about $750 psf, and assuming a 10 per cent profit margin, the target selling price could be around $820-830 psf.JLL's Mr Ong noted that at the last EC tender in July 2013, the lowest bid for the three sites (Yuan Ching Road, Punggol Central and Punggol Drive) was $295 psf ppr, while the range of bottom to top bids was quite narrow, at 16 to 29 per cent."In this tender, five of the 12 bids were below $300 psf ppr and the gap between bottom and top bid is 111 per cent."At yesterday's tender, Fantasia Investment (Singapore), believed to be a unit of Hong Kong-listed Fantasia Holdings Group, bid $347.06 psf ppr.A partnership involving Singhaiyi unit Phoenix 88, Maxdin Pte Ltd and LMG Realty (part of Lee Metal Group) offered $335.71 psf ppr. SL (Serangoon), controlled by Douglas Ong Pang Chye, bid $333.62 psf ppr. UOL offered $316.73 psf ppr and MCL Land, $312.89 psf ppr. Amara Holdings unit TTH Development joined forces with EL Development for a $270.85 psf ppr bid.Evia Real Estate, Ho Lee Group and CNH Investment teamed up for a $261.81 psf ppr bid.Also participating at the tender were Wee Hur Development ($254.59 psf ppr) and a joint-venture involving Hoi Hup Realty, Sunway Developments and Oriental Worldwide Investments ($243.79 psf ppr). Sim Lian Land placed the lowest bid - $180.06 psf ppr.